Lucernex, NRTA survey: Retailers not yet acting on FASB changes

Dallas -- A survey released by Lucernex Technologies that polled the National Retail Tenants Association members about preparedness for the upcoming FASB changes found that, for the most part, retailers are generally not ready for the new rules to take effect.



In the NRTA membership survey “FASB Preparedness in the Retail Industry,” five key findings were revealed:



First, retailers are concerned and talking about the impact of the planned FASB changes, but not yet committed to action. Many said they are not going to take action until the final regulations are published.



It also found that internal engagement is expanding beyond the real estate department, and that real estate is not leading these activities. There is limited interaction or engagement with external stakeholders, such as investors, bankers, or lenders.



Data reviews have started, although there is some confusion about what data to review. A focus on integration data and process across the organization is in the works.



Systems may be ready -- or may not be. Software vendors are updating their systems, but many companies are still using Excel spreadsheets or desktop systems, and most have not looked at their lease analytics software and processes. Many companies identified the need to look at new software solutions, but are postponing this action.



And, finally, the verdict is still out on whether the changes will impact the leasing terms and duration, but not on the decision to buy versus lease.



“There are many activities retailers should be undertaking now so that they can be in front of this change, instead of behind it,” said Mike Nuzum, CEO of Lucernex, who is also a former president of a retail organization. “Waiting until the final regulations are published to start looking at data, process integration, and system capability will put software vendors in the driver’s seat -- not the retailer. This type of reactive behavior always results in more costs, longer times to implement, and less than expected results.”